Vodafone Idea (VI) might raise something around Rs 7,540 crore through equity in the next two to three months. The debt-laden telco is currently in advanced stage talks with the global private equity investors including Carlyle and Apollo Global Management. The development comes from ET Telecom which further suggests that the telco might follow this up with the follow-on public offer (FPO) to raise another $1 billion around June 2022. This is going to change the outlook for the telco to positive in the near to medium-term for the retail investors.
Vodafone Idea Might Also Get $400 Million from Promoters
Another report from Livemint suggests that Vodafone Idea might get around $400 million from its promoters including the Vodafone Group Plc and the Aditya Birla Group. Both the promoters should ideally infuse much as capital as they can to show the world that they believe in the company. This is what is going to make a difference for the telecom operator in the long run.
One thing that’s great here is that Vi is looking to raise capital through equity here. There’s no mention of debt anywhere. This is a good thing because the telco doesn’t have any room to pile on more debt.
The third-largest telco has another way through which it can raise another $1 billion instantly. That way is through the sale of its FTTH business (You Broadband) and data centre assets. However, post the announcement of the relief package, the company has laid down its plans of selling the assets for raising capital.
With all the additional capital and the moratorium from the debt payments, Vi’s cash flow situation is bound to improve aggressively. This in turn will allow the telco to make investments in its networks for delivering better connectivity to its customers. It might help with reducing subscriber churn rate and see profits in the books.